This will be an interesting week to watch. Following last week's rally, the KLCI ended Friday at a six-month high of 992.68 points. This was 2.9 % higher than the following weekend's close of 965.17 points. Total market volume also hit the highest level in six months with over two billion shares traded on Friday alone. It's a boost certainly. A mixture of intenal and external factors had attributed to the bullish trend.
But at the local end, the PM's announcement to scrap the 30% bumiputera equity ownership quota in 27 sub-sectors has surely helped. The move has certainly helped to make Malaysia more attractive and it was one good news the market had long waited. There is supposed to be another major news on the financial services this week. Let's hope the market will react positively again. The cautious note is that there could be some profit taking there would affect the climb. Such resistance is normal and good for the market. But it is such activity that would generate interest.
There was another piece of good news. The Consumer Price Index, a barometer for inflation, continuted to ease, slowing to 3.5% in March compared to 3.7% in February. Today, the Deputy MITI Minister Mukhriz Mahathir said the government was considering scrapping the controversial Approved Permits (APs) for cars.
The series of populist measures is something the government need to do if it wishes to regain the votes the BN had lost since March 8. Further liberalisation of the affirmative actions would surely be a step forward. Malaysians want to see more need-based programmes, not ethnic skewed ones.